FHA/HUD Mortgage Lending


ZFC helps hospitals access affordable financing for capital projects using FHA Section 242. Clients can range from small hospitals to some of the nation's most prestigious teaching medical centers. FHA insurance enables clients to enhance their creditworthiness because the debt is backed by the full faith and credit of the U.S. government. FHA insured hospitals usually obtain the lowest interest rates available to their segment of the market.


FHA insurance can be used for new or existing hospitals, in conjunction with the refinancing of existing debt or to finance the purchase of existing facilities.

  • Construction financing
  • Modernization
  • Remodeling
  • Equipment
  • Expansion


Program Features

  • Borrowers can be not-for-profit, for-profit or publicly owned (governmental) facilities
  • Combined construction and permanent financing is approved at the same time
  • Maximum loan to replacement cost is 90%; maximum loan term is construction period plus 25 years with full amortization
  • The loan is pre-payable, assumable and non-recourse
  • The loan requires a projected 1.40x debt service coverage
  • Loans may be funded with tax-exempt bonds or taxable Government National Mortgage Association (GNMA) Securities
  • Projects must satisfy the state’s requirements for CON, licensure and operating standards
  • Construction and rehabilitation costs are subject to Davis-Bacon Wage requirements
  • Refinancing existing debt is possible without new construction component


Recent 242 Deal


Term Sheet(s)

We customize solutions to meet our client’s strategic and financial objectives, and take a true advisory approach into our engagements and long-term relationships. Meet our team of experts and get to know us and our work.
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